The National Economic and Development Authority (Neda) is open to the proposal to impose season-based tariffs on rice to discourage more rice imports during harvest season.
Socioeconomic Planning Secretary Ernesto M. Pernia said economic managers will
discuss this proposal during their next meeting.
Pernia made the pronouncement after Finance Secretary Carlos G. Dominguez III, a former agriculture secretary, said he wants seasonal rice tariffs to replace the quantitative restriction (QR) on rice.
Dominquez’s plan is to impose 35 percent during the lean months and 50 percent during harvest season to protect the local farmers from import surge while shielding consumers from price spikes.
“Well, we [economic managers] will discuss the possibility of imposing seasonal tariffs on rice imports and arrive at a common decision,” he told reporters in an interview.
The Philippines, which secured the approval of the World Trade Organization (WTO) to extend its waiver on the special treatment for rice, needs to amend Republic Act 8178 to scrap the QR and convert it into tariffs.
University of Asia and the Pacific (UA&P) economist Rolando Dy told the BusinessMirror that imposing a 50-percent tariff during rice harvest is “acceptable” and is an effective deterrent to smuggling.
Philippine Institute for Development Studies (PIDS) senior research fellow Roehlano Briones, who initially proposed a 35-per-cent levy on rice, said he would prefer a uniform tariff of 35 percent.
“I favor imposing a 35-percent tariff year-round. However, imposing 50 percent is also okay if we can prove that it is warranted,” Briones told the BusinessMirror.
Former Tariff Commission chief George Manzano said imposing seasonal tariffs works best for products that have a short shelf life. But for products that have a long shelf life, such as rice, Manzano said this would not be “very effective”.
He also said any tariff, seasonal or not, must be imposed within the bounds of WTO rules and agreements. Manzano added the government should see to it that these seasonal tariffs would not cause domestic rice prices to go up.
“One has to look at the trade-offs. If the seasonal tariff is very high, then the domestic price of rice may be very high, too,” Manzano told the BusinessMirror. “The government will have to weigh the welfare of the consumers against the welfare of our rice farmers.”
Last week Dominguez said economic managers are still deciding on the tariff rate to be slapped on rice imports, following the expiry of the country’s rice-import cap. However, what is certain is that it will be between 35 percent and 50 percent, Dominguez said. “I think what’s being discussed is something like 35 percent or 50 percent. [It’s] around that range.”
The finance chief added that economic managers are “thinking about a number of things” to ensure they cover all possible options on resolving the matter. Dominguez said they are open to the idea of a season-based tariff rate for rice imports.
Dominguez said this might be the best way to balance the interest of local farmers and consumers. “[As much as] we have to protect the local farmers from [the] dumping of foods, we also have to protect the consumers and hope the prices [of rice] will be moderate,” the finance chief said.
Fact is, Dominguez added, prices of local rice are higher than those of imported rice, especially if the staple is produced by a fellow Asean nation. In a 2015 study, commissioned by the Department of Agriculture, it was found out that Thailand and Vietnam have the lowest production cost for every kilo of rice.